UK: government to offer Muslim students Sharia-friendly loans

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12 September 2014 10:55

Muslim students are to be offered Sharia-compliant interest free loans by the government in an attempt to get more Islamic pupils to go to university.

Since tuition fees were increased in September 2012, many Muslim students have been put off continuing their education as it was expected the loans, which are paid back above the rate of inflation, would be used to cover the rising costs, contrary to their beliefs.

Following a four-month consultation, a new Sharia-friendly model which involves Muslim students paying a donation into a pool system instead of paying interest has been produced by the Department for Business Innovation & Skills (BIS).

The alternative scheme is expected to be introduced within the next three years, but BIS has denied it will pave the way for compliance with Sharia in a wider sense, saying:

‘Sharia has no jurisdiction in England and Wales and the Government has no intention to change this position.’

It also confirmed that students taking out the loans will pay back exactly the same amount as those who use the traditional scheme, essentially making a charitable donation rather than paying back interest.